Global economic risks including protectionism, Brexit and China-US tariff dispute taking a toll, warns trade ministry
Updated 13 August 2019
Reuters
BENGALURU: Singapore slashed its full-year economic growth forecast on Tuesday as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of recession in the city-state.
The government cut its forecast range for gross domestic product in Singapore — often seen as a bellwether for global growth because international trade dwarfs its domestic economy — to zero to 1 percent from its previous
1.5 percent-2.5 percent projection.
Singapore’s downgrade adds to concerns globally about the effect of increasing protectionism on exports and production. The deterioration in the global outlook has pushed central banks to cut interest rates and consider unconventional stimulus to shield their economies.
“GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half,” the trade ministry said.
The ministry flagged a host of growing economic risks, including Hong Kong’s political situation, the Japan-Korea trade dispute, the Sino-US tariff war, slowing growth in China and Brexit.
Final second-quarter GDP data on Tuesday showed a 3.3 percent on-quarter contraction on a seasonally-adjusted annualized basis. That was slightly smaller than the 3.4 percent decline seen in the government’s advance estimate but deeper than a
2.9 percent fall predicted in a Reuters poll and a sharp contrast to the robust 3.8 percent first quarter expansion, which was driven by brisk construction activity.
Tuesday’s data also confirmed annual GDP expanded 0.1 percent in April-June from a year earlier, its slowest rate in a decade, and lower than poll expectations of 0.2 percent and the first quarter’s 1.1 percent.
Singapore’s benchmark stock index fell 1.2 percent to a two-month low in early trade, underperforming other bourses in the region.
A central bank official said after the data that it was not considering an off-cycle policy meeting. The next of its scheduled semi-annual meetings is in October, when it is widely expected to ease policy.
HIGHLIGHTS
• Singapore sees 2019 growth at zero to 1 percent.
• Economists fear recession may be around the corner.
• Central bank says it is not considering an off-cycle policy move.
Singapore has been hit hard by the Sino-US trade war, which has disrupted world supply chains in a blow to business investment and corporate profits.
Also on Tuesday, Singapore cut its full-year forecast for non-oil domestic exports to a 9 percent contraction from an 8 percent fall previously. That comes after a 26.9 percent drop in electronics exports in the second quarter year-on-year.
“With trade tensions between the US-China unlikely to abate soon, we expect exports and trade-related services to push the economy into technical recession in Q3,” said Sian Fenner, lead Asia economist at Oxford Economics.
New Zealand, India and Thailand all cut interest rates last week, signalling major concerns about the outlook for economic growth. Last month, the US Federal Reserve cut interest rates for the first time since 2008.
Singapore Prime Minister Lee Hsien Loong said in an annual speech last week that the government stood ready to stimulate the economy.
“It feels like the storm is coming if you look at the whole macroeconomic fundamentals softening,” said Selena Ling,
head of treasury and strategy at OCBC Bank.
“All the downside risks are piling up on one side,” Ling added, pointing to the myriad of global risks flagged in the trade ministry statement.
A faltering economy is expected to crimp growth at Singapore’s three local listed banks, which have so far benefited from improved margins, steady interest rates and loan growth.
ACWA Power expands into China with over 1GW of renewable energy projects
Updated 30 December 2024
Nour El-Shaeri
RIYADH: Saudi utility giant ACWA Power has announced its successful expansion into China, securing over 1 gigawatt of renewable energy projects.
The portfolio includes solar photovoltaic and wind energy initiatives, which will be jointly owned by ACWA Power and leading Chinese renewable energy firms.
In a statement to Tadawul, ACWA Power confirmed that the projects are spread across several Chinese provinces and are in advanced stages of development. This milestone represents the company’s formal entry into China’s renewable energy sector, positioning ACWA Power for future growth in one of the world’s largest clean energy markets.
The expansion aligns with ACWA Power’s broader ambitions in China. Earlier this month, Yunhe Lyu, head of ACWA Power’s China operations, shared plans to invest up to $50 billion in renewable energy projects across the country by 2030. The company aims to acquire clean power assets with a capacity of up to 20 GW and to develop 1 million tonnes of green hydrogen.
“We have an ambitious target of investing up to $50 billion in green energy, renewable technologies, green hydrogen, and desalination projects by 2030,” Lyu told Bloomberg. “Our goal is to reach 1.3 GW of renewable energy capacity in China by the end of this year.”
ACWA Power’s strategy also involves collaboration with Chinese state-owned enterprises, both within China and abroad. For example, the company partnered with China Southern Grid International in July on a wind project in Uzbekistan and with State Power Investment Corp. on power initiatives in Saudi Arabia.
The expansion into China is part of a broader strengthening of economic ties between Saudi Arabia and China. Since Chinese President Xi Jinping’s visit to Riyadh in 2022, the two nations have deepened their economic collaboration, particularly in sectors aligned with Saudi Arabia’s Vision 2030.
In 2023, bilateral trade between the countries reached $107.23 billion, with China exporting $42.86 billion in goods to Saudi Arabia and importing $64.37 billion, primarily crude oil and petrochemical products. By August 2024, trade had already totaled $70.87 billion, continuing to show robust growth.
Notably, China has become the Kingdom’s leading source of greenfield foreign direct investment, contributing $21.6 billion from 2021 to October 2024. About one-third of this investment is in clean technologies such as solar, wind, and battery storage.
Saudi Aramco has also been instrumental in strengthening bilateral ties. In November, Aramco, in partnership with China’s Sinopec, began construction of a $9.82 billion petrochemical complex in Fujian province. The project will include a 320,000-barrel-per-day refinery and a 1.5-million-tonne-per-year ethylene plant, with full operational status expected by 2030. This project is set to boost China’s refining and petrochemical capacity while reinforcing Aramco’s position in the downstream energy sector.
Earlier in September, Aramco signed several key agreements with Chinese partners, including a development framework agreement with Rongsheng Petrochemical Co. Ltd. and a strategic cooperation agreement with Hengli Group Co. Ltd. These partnerships are aimed at enhancing China’s energy security and supporting the country’s industrial development.
Beyond traditional energy, Aramco’s collaboration with China also extends to advanced technologies and lower-carbon energy solutions. In March, Aramco President and CEO Amin Nasser addressed the China Development Forum in Beijing, underscoring the company’s commitment to being a reliable energy partner and its vision for future cooperation in the global energy transition.
Closing Bell: Saudi indices close in green for second day in a row
MSCI Tadawul Index increased by 11.41 points, or 0.76%, to close at 1,505.97
parallel market Nomu gained 460.61 points, or 1.48%, to close at 31,513.42
Updated 30 December 2024
NOUR EL-SHAERI
RIYADH: Saudi Arabia’s Tadawul All Share Index gained 0.91 percent, or 108.17 points, to reach 12,000.92 points on Monday.
The total trading turnover of the benchmark index was SR5.1 billion ($1.3 billion), as 172 of the listed stocks advanced, while 65 retreated.
The MSCI Tadawul Index also increased by 11.41 points, or 0.76 percent, to close at 1,505.97.
The Kingdom’s parallel market Nomu also reported increases, gaining 460.61 points, or 1.48 percent, to close at 31,513.42. This comes as 39 of the listed stocks advanced, while as many as 47 retreated.
The index’s top performer, Saudi Reinsurance Co., saw a 10 percent increase in its share price to close at SR51.70.
Other top performers included Saudi Industrial Development Co., which saw an 8.98 percent increase to reach SR30.95, while Walaa Cooperative Insurance Co.’s share price rose by 7.42 percent to SR19.68.
Middle East Specialized Cables Co. recorded a positive trajectory, with share prices rising 6.17 percent to reach SR43.90. Fawaz Abdulaziz Alhokair Co. also witnessed positive gains, with 5.07 percent reaching SR12.84.
Alkhaleej Training and Education Co. was TASI’s worst performer, with the company’s share price falling by 3.26 percent to SR31.15.
Sustained Infrastructure Holding Co. followed with a 2.86 percent drop to SR32.25. National Medical Care Co. also saw a notable decline of 2.11 percent to settle at SR167.40.
Elm Co. and Arriyadh Development Co. were among the top five worst performers, with shares dropping by 2.06 percent to settle at SR1,114.80 and by 2.03 percent to sit at SR33.85, respectively.
On the announcement front, WSM for Information Technology Co. has finalized its acquisition of Wasl Technology Information Systems Limited Co., marking the conclusion of a transaction valued at SR8.5 million.
The company announced the signing of the final purchase agreement on Dec. 29 with Tanabw for Information Technology, effectively transferring Wasl Technology Information Systems into a branch of Tanabw.
The acquisition process began with the signing of a non-binding memorandum of understanding on Oct. 27, followed by regulatory approval on Nov.10 when WSM received a No Notification Required Certificate from the General Authority for Competition. Value Capital acted as the financial adviser for the deal.
The transaction is expected to expand WSM’s technology capabilities and strengthen its presence in the IT sector. Further details on integration plans and strategic objectives post-acquisition have yet to be disclosed, the company stated in a bourse statement.
WSM closed Monday’s trading session with a 4.30 percent increase to reach SR49.70.
Also, Waja Co. has announced the signing of a Shariah-compliant bank facility agreement with Alinma Bank, securing financing worth SR16 million. The agreement, finalized on Dec.30, has a tenure of one year.
The facility is backed by a promissory note from the company and will be used to support Islamic financing for letters of credit, various Islamic bank guarantees, and tawarruq transactions.
Waja’s move aligns with its strategy to enhance its financial capabilities while adhering to Islamic banking principles.
The financing is expected to bolster the company’s liquidity and operational flexibility, enabling it to pursue its business objectives effectively. Further updates regarding the utilization of funds were not disclosed, according to a bourse filing.
Waja Co.’s share price dropped 0.25 percent on Monday to settle at SR7.86.
Hotel sector now boasts more than 40,000 keys, reinforcing its capacity to cater to an increasing influx of travelers
Tourism traffic in the GCC is expected to rise as countries work to reduce their reliance on oil
Updated 30 December 2024
NADIN HASSAN
RIYADH: Qatar welcomed 5 million visitors in 2024, surpassing its target of 4.79 million and marking a 25 percent increase in international arrivals compared to the previous year.
The growth underscores the country’s rising prominence as a global tourism hub and highlights several key milestones, including surpassing its annual goal of 8.8 million room nights sold, reaching nearly 10 million room nights to date.
The country’s hotel sector now boasts more than 40,000 keys, reinforcing its capacity to cater to an increasing influx of travelers, according to a press release.
The achievement aligns with Qatar’s National Tourism Sector Strategy 2030, which aims to welcome over 6 million annual visitors by the end of this decade, positioning the country as the Middle East’s fastest-growing tourist destination.
“Surpassing five million visitors is a landmark accomplishment for Qatar, bringing us closer to realizing our vision of positioning the country as one of the world’s fastest-growing, family-friendly premier destinations,” said Saad Bin Ali Al-Kharji, the chairman of Qatar Tourism.
“This milestone is not only a celebration of our accomplishments but also a foundation for future growth as we continue to deliver unique experiences and service excellence across all the tourism touch points for every visitor,” he added.
The year’s visitor demographics reveal that 41 percent were Gulf Cooperation Council nationals, while 59 percent came from international markets, led by Saudi Arabia, India, the UK, Germany, and the US.
Qatar also recorded 56 percent of arrivals by air, 37 percent by land, and 7 percent by sea.
This comes as tourism traffic in the GCC is expected to rise as countries work to reduce their reliance on oil.
The tourism sector’s contribution to gross domestic product is expected to grow from $130 billion in 2023 to over $340 billion by 2030, exceeding 10 percent of the region’s GDP, according to a report released by Fitch Ratings in July.
The aviation industry will be crucial, with Fitch Ratings forecasting significant growth in passenger traffic, supported by some of the world’s most modern airports, including Dubai International with 87 million passengers, Hamad International in Doha with 45.9 million, and King Abdulaziz International in Jeddah with 42.9 million.
Qatar’s visitor numbers have steadily increased throughout 2024, with notable growth in both the early and late parts of the year.
Major events, such as the AFC Asian Cup in January, the Formula 1 Qatar Grand Prix, and the 2024/2025 cruise season, contributed to the surge in arrivals, particularly during the November school holidays when visitor numbers from Saudi Arabia were notably strong.
“Our tourism goals are ambitious but achievable. Between 2022 and 2030, we aim to nearly triple our visitor numbers and to at least double the tourism in-destination spend,” Al-Kharji said.
As Qatar continues to attract global travelers, the country remains focused on offering quality experiences and showcasing its cultural heritage.
By inviting visitors to explore its unique landmarks and family-friendly attractions, Qatar is strengthening its position as a top global tourism destination.
Looking ahead, Qatar’s tourism strategy aims to triple its visitor numbers by 2030, while also doubling the tourism sector’s contribution to the country’s GDP, targeting a range of 10-12 percent.
Tourist spending in Saudi Arabia up 27%, reaching nearly $7bn
Spending by residents traveling abroad increased by 21.79% to reach SR26.33 billion
Inbound tourism spending has shown notable fluctuations throughout the year
Updated 30 December 2024
Dayan Abou Tine
RIYADH: Tourism spending in Saudi Arabia saw an annual increase of 27.25 percent in the three months to the end of September, hitting SR25.05 billion ($6.68 billion), according to new figures.
Data released by the Saudi Central Bank, also known as SAMA, also showed that the spending by residents traveling abroad increased by 21.79 percent to reach SR26.33 billion.
The travel balance of payments recorded a deficit of SR1.28 billion, marking a 33.83 percent decrease compared to the same period last year. The balance showed a surplus of SR40.17 billion for the first nine months of the year, reflecting a 4 percent increase from the same period in 2023.
These spending patterns align with the Kingdom’s broader ambition to rank among the top 10 global tourist destinations by the end of the decade, as outlined in its Vision 2030 economic diversification strategy.
Recent cultural advancements, including hosting art exhibitions and high-profile entertainment events, demonstrate Saudi Arabia’s commitment to enhancing its global image.
Landmark initiatives, such as the newly approved “Visiting Investor” visa, further signal the nation’s intent to attract diverse visitors while supporting the tourism sector’s growth.
Inbound tourism spending in Saudi Arabia has shown notable fluctuations throughout the year, shaped by a blend of cultural, religious, and seasonal factors.
Religious tourism, which accounted for 42 percent of all inbound visits in 2023, according to the Ministry of Tourism annual report, plays a pivotal role in this variation.
Pilgrimages during the holy months of Hajj and Ramadan drive significant surges in visitor numbers and spending, underscoring the importance of faith-driven travel to the Kingdom’s tourism sector.
Non-religious inbound tourism, which made up 58 percent of arrivals during 2023, might exhibit different dynamics influenced by factors such as climate.
Leisure tourists and those visiting friends and relatives often plan their trips during months when temperatures are milder.
This seasonal preference explains why tourism spending tends to peak during the second quarter of the year. In 2024, inbound spending reached SR47.6 billion in the second quarter, following a similar trend in 2023, when spending in the same period was SR48.93 billion.
By contrast, expenditures dropped to SR19.68 billion in the third quarter of 2023, coinciding with the peak summer heat.
Makkah remained the most visited destination in 2023, according to the ministry’s report, welcoming 15.4 million tourists, driven primarily by religious purposes.
Madinah, a secondary destination for many pilgrims, attracted 9.6 million visitors. Riyadh also emerged as a major draw, hosting 2.8 million tourists and reinforcing its growing reputation as a cultural and business hub.
Religious tourism generated the majority share of spending, contributing 55 percent of the total or SR77.4 billion, followed by visits to relatives and families at 19 percent or SR26.3 billion.
Leisure tourism, encompassing activities like entertainment and sightseeing, accounted for SR21.6 billion.
Startups of the Year: Zid and Salla revolutionize Saudi Arabia’s e-commerce landscape
Zid platform allows merchants to manage e-commerce stores, social media sales, and physical outlets from a single dashboard
Salla has cemented its position as a major player in the Kingdom’s rapidly growing digital economy
Updated 30 December 2024
Nour El-Shaeri
RIYADH: E-commerce in Saudi Arabia witnessed a landmark year in 2024, with startups Zid and Salla leading the charge to reshape the Kingdom's — and region’s — digital economy.
These two firms have empowered merchants, enhanced digital infrastructure, and set the stage for exponential growth in Saudi Arabia’s online retail sector.
Zid: Where commerce meets innovation
For Zid, a Riyadh-based e-commerce enabler, the introduction of its “Total Commerce” vision at Ripple 2024 marked a defining moment in its scale-up journey.
In an interview with Arab News, Sultan Al-Asmi, CEO and co-founder of Zid, described the launch as a milestone that “wasn’t just a product launch; it was the unveiling of a unified ecosystem designed to redefine how merchants in Saudi Arabia — and eventually the region — conduct business.”
The platform allows merchants to manage e-commerce stores, social media sales, and physical outlets from a single dashboard.
He further emphasized Zid’s partnerships with platforms like Amazon, Snapchat, TikTok, and Meta, as well as its integration of artificial intelligence-powered tools, which are designed to “future-proof commerce in the Kingdom and across the region.”
Al-Asmi said: “Saudi Arabia’s e-commerce landscape is expanding rapidly, but logistical inefficiencies remain a significant barrier, especially for small and medium-sized businesses looking to scale globally.”
To address these challenges, Zid introduced a unified logistics dashboard to simplify inventory management and shipment tracking.
The company also launched flexible financing options to help merchants manage shipping costs and expand their reach.
“By integrating platforms like TikTok Shop and Amazon Marketplace and introducing AI-powered marketing tools, we’ve provided our merchants with innovative solutions to adapt to these changes and positioned them to capitalize on opportunities to drive sustainable growth,” Al-Asmi added.
Sultan Al-Asmi, CEO and co-founder of Zid. Supplied
The co-founder said that 2024 has been a year of exponential growth for Zid as the company transitions from “start-up to scale-up.”
Zid’s efforts have resulted in exponential growth. In 2024, its merchant base increased by over 30 percent, surpassing 12,000 active users, while the stock-keeping units on its platform exceeded 4 million.
The company also processed billions of transactions, providing valuable insights into Saudi commerce.
Al-Asmi highlighted the tangible impact of Zid’s solutions, stating, “Merchants on our platform have consistently increased both average basket sizes and conversion rates by 50 percent, reflecting the effectiveness of our solutions in driving larger transactions compared to our competitors,” he said.
“Additionally, our merchants experienced a 25 percent year on year growth in GMV (Gross Merchandise Value) and significant growth in the average number of orders per merchant, reinforcing Zid’s role as a reliable growth partner,” Al-Asmi added, going on to say that merchants who participated in Zid’s “10x” program saw their revenues grow tenfold.
In addition to its technical innovations, Zid credits its internal culture for its success. “At Zid, our culture is rooted in collaboration, resilience, and a relentless focus on merchant success,” said Al-Asmi.
He noted that the company’s leadership team draws on years of experience in Software-as-a-Service, retail, e-commerce, and technology, which has enabled the team to tackle complex challenges.
As Zid looks ahead to 2025, the company is focused on deepening its impact in Saudi Arabia while expanding its regional presence across the Gulf Cooperation Council.
Al-Asmi shared the company’s priorities for the coming year, stating, “Our priorities include further enhancing the Total Commerce ecosystem by introducing advanced AI capabilities, expanding Zid Financing to make capital more accessible to merchants, and driving adoption of cross-border commerce solutions.”
He emphasized that cross-border commerce represents a significant growth opportunity for Saudi merchants.
“GCC consumers have a deep appreciation for Saudi products due to their exceptional quality, cultural relevance, and value,” Al Asmi said, highlighting Zid’s efforts to strengthen logistics infrastructure and integrate platforms like Trendyol and Noon to its marketplace suite, which already includes Amazon Marketplace.
Al-Asmi underscored that sustaining momentum requires both innovation and collaboration.
“We plan to strengthen our existing collaboration with global platforms like Snapchat, Google, Meta, and TikTok while continuing to invest in local talent and infrastructure,” he explained.
“Our goal is to create an environment where every merchant can compete and win, regardless of size,” Al-Asmi stated. “With the groundwork laid this year, we are confident that Zid is well-positioned to lead the next chapter of commerce innovation in the region.”
The company has raised $59 million in funding to date, with its latest series B round garnering $50 million in 2021.
Salla: Empowering Saudi e-commerce growth
Salla, one of Saudi Arabia’s leading e-commerce enablement platforms, has cemented its position as a major player in the Kingdom’s rapidly growing digital economy through a series of high-profile partnerships and strategic milestones in 2024.
From securing substantial pre-initial public offering funding to integrating advanced tools for merchants and expanding digital payment solutions, Salla continues to shape the future of online business in the region.
In one of the year’s most notable announcements, Salla closed a $130 million pre-IPO investment round led by Investcorp, with participation from Sanabil Investment, a company owned by the Public Investment Fund, and STV, an existing shareholder.
“We are deeply grateful for the trust and investment from Investcorp and Sanabil in Salla, which reflects their confidence in our vision and our platform’s potential,” said Nawaf Hariri, CEO and co-founder of Salla.
The funds are expected to fuel the company’s growth as it supports over 80,000 active merchants across the region. Hariri emphasized Salla’s commitment to “empowering individuals, SMEs, and enterprises to start and expand their businesses both within and beyond Saudi Arabia.”
Salla’s platform has already enabled over $7 billion in e-commerce sales since 2020 and is tapping into Saudi Arabia’s $20 billion e-commerce market, which is projected to grow by more than 25 percent annually.
Nawaf Hariri, CEO and co-founder of Salla. Supplied
With a proprietary SaaS solution, Salla allows merchants to launch fully digitalized and automated online stores within hours, integrating payment solutions, logistics, and a suite of over 400 applications to support businesses throughout their lifecycle.
The company also strengthened its technology offering through a partnership with Adjust, a global analytics and measurement firm. This integration allows Salla merchants to access advanced app analytics tools, enabling them to optimize campaign performance and scale their businesses.
Amin Fadul, VP of Product at Salla, highlighted the benefits of this collaboration: “By leveraging Adjust’s powerful analytics and attribution tools, our users will have access to deeper insights into customer behavior, allowing them to make data-driven decisions that enhance their marketing strategies and drive growth.”
Adjust’s features, such as customer journey tracking, deep linking, and smart recommendations, complement Salla’s native mobile app maker to help merchants expand their mobile commerce capabilities.
Further enhancing its ecosystem, Salla partnered with STC Bank, Saudi Arabia’s first licensed digital bank, to integrate it as a payment option across more than 80,000 online stores powered by Salla.
This partnership offers merchants and their customers secure and convenient digital payment options directly through STC Bank accounts. By streamlining payment processes, the collaboration aims to boost digital payments and support the Kingdom’s broader digital transformation goals.
“This integration is expected to contribute to a more seamless shopping experience for online customers while reinforcing Salla’s role as a leader in the Saudi e-commerce market,” STC Bank said in its announcement.
